 Hello and welcome everyone at this fourth press conference of the day here at the World Economic Forum on ASEAN in Vietnam Right now we'll be looking at the future of ASEAN or as it's announced in the press conference schedule ASEAN at a tipping point and the reason why we are looking at ASEAN as being on a tipping point is Because what we've seen in the last 50 years is that ASEAN has grown to become the sixth largest economy worldwide But what got it here won't get it to the next phase. That's a major finding of a PWC report that has been prepared by the guest speakers of today namely Dinty Quynvan senior partner at PWC here in Vietnam and David Wijeratne the partner leader of the Growth Markets Center of PWC in Singapore and an author of this study on a future of ASEAN Welcome to both of you Okay with that and without further ado, I'd like to ask David to Bring us up to speed David So ASEAN has grown to the sixth largest economy But the assertion is in order to grow continue to grow further It will have to come up with innovative strategies in which the private sector plays a Big role. Could you tell us a little bit more about that? Vietnam and the World Economic Forum for hosting this year's summit in Hanoi I think it's been a tremendous event so far Yes, you're right here as many people know last year marked the 50th anniversary of ASEAN Which was a tremendous? Achievement given the first 50 years of the 20th century and what characterized ASEAN as it overcame Poverty and a great deal of conflict now as you rightly say it is the sixth largest economy in the world It's touted to be the fourth largest by 2030 It has a GDP of 2.75 trillion dollars and is the fourth largest trading region In the world, you know accounting for about 7% of global exports, you know ASEAN's growth has been predominantly founded upon its people first and foremost the orange is tremendous labor force and that has then led to You know rising incomes the creation of emerging middle-class larger consumption, which has driven an economy supported by You know some well-managed government debt at least comparison in comparison to other emerging markets and A build-up of foreign reserves that all of that has actually positioned ASEAN to be the fourth largest or fourth most attractive Foreign investment destination globally and second behind China in the region But against that backdrop there are a number of challenges for the next not only 50 years But the next five years for ASEAN and these challenges are both Outs external to the region and within the region. Yeah, so externally You know given that ASEAN is Dependent 75% of its exports are based on trade outside of the region Now if you take that in the context of a declining global trade downward trend since 2012 China's economic planned economic slowdown and potential trade war that we're seeing between China and the US ASEAN is very susceptible to to outside forces from an external trade perspective and then in addition to that you take the fourth industrial revolution And what has been discussed here in the next three, you know these three days is that at least in the near term the fourth industrial revolution will bring some amount of of of pain and Namely in the form of unemployment in that regard, you know Whether that is due to production and services being reshored closer to demand or the adoption of AI within the region You know near-term unemployment is a threat leading to social unless leading to a drop in consumption These are challenges to the region From an external perspective internally Productivity is the number one challenge to the region. You're seeing that as the as the region moves up from being a low Low-cost labour Market and the manufacturing hub of the world moving up to more value-adding services Productivity is a real challenge to the region in addition to well-known challenges around infrastructure and institutional reforms So with all that as as a sort of context, you know, we we have Presented a perspective as to what does ASEAN have to do Going forward to ensure continued growth. What proactive measures? Should it take for three key stakeholders? And so the first state go-holder group is the ASEAN Secretariat itself so the community of nations and one of the key recommendations that we're making is that this group really should be focused on that first challenge of of Dependency on external trade. You know, so what can the ASEAN community as in Secretariat do to facilitate internal trade so focusing on, you know trade barriers, but in particular Technical trade barriers. Now, these are things that are not just Challenges to ASEAN earlier in the week you'll have seen the US and the EU talk about technical barriers to trade You know, so this is this is a challenge that that even developed economies focus upon but harmonizing that will create a more Fluent and fluid internal economy from a trade perspective within ASEAN Our second group of stakeholders are the the countries themselves and as you know, you know ASEAN is quite a wide asset to Aspera of nations and at different stages of an economic journey And so we looked at this was taking their economic Current position and their demographic transition and creating five categories Which is slightly innovative. So the first category being those were aging High-income groups. So, you know, that is Singapore and Brunei and they're facing challenges around an aging workforce low a reduction an aging population a reduction in the workforce and therefore a challenge on Funding those people that are coming out of the workforce, but with fewer people to fund that So productivity being a key challenge and how can they adopt measures in ICT and Skilling and innovation to basically do more with with fewer people The second group are the aging middle income. So that those are countries such as Malaysia and Thailand now these countries have traditionally, you know Leverage their low labor cost wages to attract investment and generate goods But now as these wages increase the demand will be for Them to produce better more value-adding goods and services You have to if you're going to demand more, you know higher wages You've got to create something of higher value So they have to move up the value chain and create an environment both from a skills perspective and a capability perspective to to Justify those higher wages and then the third group the third category is actually a category of one and that is of Vietnam Which is an aging low-income group and you know, I'm going to talk a bit about that later on But in that regard, you know, how can Vietnam? Manage its it's a workforce to ensure that more women come into the economy more More older people stay in the workforce whilst also taking advantage of the digital economy to foster Greater services and growth Now on the other side, you have the younger economies Yeah, that is they really make up what a lot of people talk about the young demographic in ASEAN And so if you talk about the younger middle income, you're talking about countries such as Indonesia and the Philippines Yeah, large economies. So you've got large economies. You need to create jobs That is that the key challenge to Indonesia and the Philippines is to create a lot of jobs But also quality jobs, but you can't just rely on Corporations and state-owned enterprise to create these jobs You need to foster an environment for entrepreneurship. So families and friends Communities come together actually create their own businesses to facilitate growth themselves. You can't just depend on The private corporation and state-owned enterprises to create these jobs and then the final category Now those the younger demographic lower income So those are the countries such as Myanmar, Cambodia, Laos Which do have a bit longer They've got a bit of time because of the younger demographic that they have but they've got a longer journey to go They've got longer. They've got a bit more to do on their institutional form So they have to try and attract foreign investment Maybe some of the lower value work that Thailand and Malaysia are relinquishing that China's relinquishing To create a foundation of that economy which will then fuel the Provide incomes for families to take their children to then have the skills to create more value-adding Services and products in in the next generation of the economy So that sort of sets a scene that that you know whilst people talk of asian as one region It is actually quite disparate There's a rather just dashboard in that economy and companies have to really understand How they when they look at a regional operating model how to place themselves across those ten markets So if you've got the secretariat, you've got the individual countries playing their roles Corporations also have a key role to play in taking the asian economy forward I'm from our report. We looked at seven key sectors being the automotive industry consumer banking consumer goods medical devices refined fuels transportation telecoms and medical devices and What we looked at there there were three key themes for future strategies of growth First being more localized economies more localized businesses So if you take the automotive industry for example, and you know even companies in Japan are beginning to do this They are trying to create more of their operating model within the within asian or within Thailand in this example So not only just doing semi-assemble, but actually sourcing locally local R&D Local manufacturing and then local and regional and then out of asian distribution So actually putting more of your business into asian and sourcing from asian from that The second key strategy is around a more holistic digital operating model We've had a lot the last couple of days about the power of digital in reaching consumers through e payments and mobile banking Mobile commerce that is a lot of top-line growth. How do you reach consumers? And the consumer goods companies have a tremendous opportunity here They can reach for once and for all direct to their their consumer base and generate lowlty But if you look at the other end of the operating model digital capabilities can really help transform a business and become more efficient Not only in their supplier supplier base management by using technologies such as blockchain But also within the manufacturing and warehousing part of a consumer goods business So it's looking at applying digital capabilities in a more holistic perspective Rather than just looking at it from a sales and marketing perspective like a top-line growth Really looking at it from a holistic perspective And then finally the third key theme for asian growth for corporates is around partnerships and alliances Now we're seeing convergence within sectors, but a lot of companies are still Relatively reluctant to break down the barriers and partner with companies from other sectors or even within their sector And yet that is a key element for growth. If you take one example such as transportation in the aviation industry You know full service carriers in this region face quite Challenging time on the mid-haul routes. So going from Singapore to Bangkok Bangkok up to Chiang Mai Partly because there are a number of low-cost airlines around but also regulations prohibit the Hub to first city going on to the second city second city being Chiang Mai So how do you overcome that? Do you just come out of the market or do you pursue with it with more of a an aligned strategy So one learning from the other parts of the world you can see is how Full-service carriers can partner with rail and as high-speed rail becomes more prolifant across asian You begin to see how full-service carriers can work with rail to To rate these spokes and have a further reach increased utilization and still stay competitive So from that perspective the three stakeholders the asian secretariat the countries themselves and corporates All have a role in taking asian forward, but it's in a new way. It's bringing innovative strategies. It's being proactive What grew asian to today will not grow asian for tomorrow. It needs a time to act in that regard Thank you so much, uh, uh, david for those very comprehensive insights. Um, now i want to turn to, um queen van because of course we are here, uh in asia, but we're also in vietnam And and so we want to know of course what uh, what are the possibilities for vietnam going forward when david talked about uh, those categories of countries it was um Well, perhaps not the the most bright picture for vietnam talking about a category of one of aging uh societies with a lower Income however when we come here we feel the energy we feel the hustle and the bustle and of course in economic growth nowadays Uh, uh, vietnam is is even outpacing china. I believe this year at about seven percent. So so in other words, uh, It feels like things are going well here in vietnam We hear from david, uh, that things will have to be better going forward What are the takeaways for vietnam and what can vietnam do or should vietnam do and its country companies do going forward Thanks vita and as david has said the all of the challenges that asian have and vietnam is nothing No different or if not that we have we smoke the challenges of from both aging country and also the country which has low income So it's all combined. So we say that we do have more challenge, you know She looked at vietnam just over the past 10 years. We have impressive, uh, gdp growth of seven percent But despite that you look at the gdp capital and the gdp itself is a total vietnam still in the group of the I mean the bottom of the asian With the populations of 95 millions growing to over 100 millions etchings and so on So we have a lot of challenges to to deal with one With a workforce of over 50 millions In the workforce. So actually creating jobs for those workforce is a challenging task for the government and looking at as david also mentioned Asian in the next five ten years will be different from asian in the last 10 15 years with all of this digital economy Vietnam with 22 percent of the workforce is trained and skills How are we how vietnam can top into that new of the digital? How do we really train the people? It's almost 80 percent of our workforce are in skills So we used to lead based on the growth that vietnam have achieved over the past year It's looking for its big market. It's a geographic, but also Primarily it would be on a low labor cost That low labor cost is diminishing that advantage is diminishing And we if you consider asian productivity is low compared with the world vietnam Productivity is actually in the bottom half of the asian. So it's very low And that is just it's simple because we have Relying on unskilled workers unless we bring up the education training workforce We are not going to really improve the productivity setting for vietnam for the government but also for the corporate is Actually, how do we what is own is arounding to improve the productivity that business to focus on Investment in technology, but also training training of the workforce if the government And then the company also need to focus on that and I think in that There's a number of companies that are successful in vietnam The those are the ones who actually invest in the resources in the technology, but it's also their internal resource So I think from a bigger picture But looking into that if vietnam would have to move up the chains and got into the more value added But we cannot do that without Building the skills and building the skills takes time It's not like technology that you invest you begin even if you invest in technology You do need to have people to actually Can operate it because it's all of that. It's just a tool so Focus on skills building skills buildings focus on I think more in terms of education skills skill building trainings But also then more investment in in the technology Part of that and that's of course a very important topic and one that we're addressing also here At the world economic forum on on a zian is a technology aspect of all of this Technology aspect of that I think to to vietnam Beyond that is the resource Yeah, I think into that Absolutely. I want to give the opportunity to the audience to ask some questions So if you have a question, please raise your hand. We have a microphone right there And if you do ask question Identify yourself first and then ask your question immediately after I'm having a quick look here in the audience Over here in the front and wait for the microphone go ahead Thanks I have a question for david. My name is manford. I'm from Switzerland based in singapore Malaysia is an interesting case you mentioned that right? Middle income country sort of a candidate for the middle income trap What do you think of the new government of martyre's idea to promote again? The automotive industry in malaysia. Is that a good idea or is it just falling back into the old thinking Should they Be a more innovative strategy, so you probably like the other I think it's I think it's too early to attest anything that martyre is coming out at this point. You know, I think There is a period of let's just see What the journey what journey he's going to put out there because Just mentioning automotive as an industry for growth for malaysia. Well, what's the bigger picture? Now, how does that fit in and I think at the point I was trying to make here I'm going to build on peter's point is that economies have to look at all those components That are going to build one economy So if malaysia does want to go back to to focusing on automotive that would be interesting But what are the what are the details that build up the rest of the economy in that regard? You know, and how does that play against, you know, the other players in thailand so I would say I won't necessarily comment too to detailed on that because without seeing the whole economic agenda From from from from malaysia at this point. It's hard to comment on just one specific element to it, you know Very well, thank you See if there's another question from the audience over there Waiting for the microphone So hi, I'm a fan from vtv. I'd like to address a question to miss van about vietnam So, uh, you've been talk. There's this idea this concept of a middle-income trap So I want to mention in the case of vietnam for example right now vietnam is already graduating from IDA and a lot of cheap odas or other funds are not going to be easier to to get so what how how how Is um, what do we do comment on on this particular case of vietnam? Yes, actually vietnam we just move from the low income to mid-income country But it's actually still at the very beginnings of you look at mid-income So it's from here to there as a real 2000 I think the mid-income country from 2000 to 20,000 and we are just two or two by two So it's very early Just getting in So the is it's a long way to go into actually we get into the to the The traps of course, I think with all of these soplone and oda and and and so on It's not easy for vietnam to get the the funding So it's good clearly for companies and the government would have to look at alternative funding But I think to me from what we see I would think that it's the clever investment of In the effective of the investment could solve the problems because for vietnam you can see how do we spend Particular public investment is not that effective So it's you do new link with lack of the funding on the other hand if we can see On how do we spend the money wisely to generate the grow? It's it's one of the part of health and also encourage Private investment so I think it's not of the none of the country can really looking at just government funding But the funding from the private business and other source is That's something that we can vietnam can shoot leverage for the to support economy grow And you can see you can see from the statistic It's actually the domestic private business in vietnam The have a high scroll rate among the three sectors sector and fdi and that contribution to the to the GDP grow over the over the year It's also very impressive. So it's becoming it's very key and and and Key foundations for the vietnam economy going forward. That's how we can how I can see it Very well. Thank you so much. I think we have time for one more question from the audience The question that came up earlier today david is sort of the The question of what can you do on your own versus how much are you? Sort of a victim of what's going on in the bigger geopolitical and geoeconomic theater And of course, as you mentioned, the the asian exports are very dependent on On the bigger world, let's say out there So what is it actually that asian countries can do to make themselves? Let's say geopolitical resilience or or or us or china proof so to speak I think it comes back to it was a comment that's made this morning that 80 percent of the people In asian Yeah, I'll I'll I'll within the sort of SME category in that regard and I think Whether communities local governments and even you know national governments can help to focus on those economies Because as we said there is plenty of growth within asian within the 660 people That has been untapped as yet And so to facilitate that group that that those Those companies to grow locally and then you know as Inter-trade becomes more facilitated within asian is a real key It's I think that's one thing that's more in the control and I and I mentioned communities because even in communities There's the ability to to grow within your community if you have that innovation and that entrepreneurial spirit So facilitating entrepreneurship at grassroots And letting it expand and grow through digital capabilities, which then brings in the skills that queen van talks about There's a lot that can be done locally That shields you from outside forces and then you can take advantage of external trade as As you like you're you know that that's in more of your control But being so dependent upon it you're you're less in control of your own destiny That's actually destiny is almost in the control of grassroots businesses Excellent, and that's a beautiful point to to end on I want to thank again both of the speakers today Queen van and david and of course you can get the report I believe we have a one pager here for everyone That talks about the main findings of the report and then there's the whole report Which is available in digital form because it would be a little bit of a waste of paper if we printed that in thousands It's a wonderful report that you can get from pwc. Thank you all for being here and thanks to my guests